Suppose an increase in world demand for potash (used in the production of fertilizer)increases the price by 22 percent.Annual Canadian production increases by 33 percent.What is the elasticity of supply of Canadian potash?
A)0.22
B)0.33
C)0.67
D)1.0
E)1.5

Question

Quizplus · Accepted Answer

The elasticity of supply is calculated as the percentage change in quantity supplied divided by the percentage change in price. Here, it is 33% / 22% = 1.5.

Suppose an Increase in World Demand for Potash (Used in the Production